It is very difficult to forecast what might possibly happen in 2019 – after all, forecasting is not an exact science – but one thing is certain: the overbearing negativity will definitely follow us into the New Year.
By Darlington Musarurwa
As a country, we seem to be irrationally obsessed with negativity. Even when we are given reason to hope, we choose to be hopeless; when we are given reason to do, we choose to undo; and most worryingly, when we are given reason to believe, we choose to disbelieve.
Notwithstanding encouraging progress in exports, agricultural and mining output, including exceptional performance in tourism, many are already predicting doom and gloom for 2019. For global market and opinion research companies such as Ipsos MORI (a UK-based market research firm), such a phenomenon is not uncommon.
In fact, it has a name; they call it “declinism.”
It is a phenomenon that Adrian Gore – founder and CEO of Discovery, which is one of South Africa’s biggest financial services firms – knows all too well.
Gore was recently gored (pun intended) by some doomsday critics for talking up prospects for the South African economy.
Responding to withering attacks on his supposedly rose-tinted views, the business executive noted that empirical evidence indicates that irrationally seeking out negatives and being overly pessimistic has dangerous consequences.
“Global research shows that we universally suffer from declinism – the belief that our country and public life are on an irreversible downhill trajectory and that the future will undoubtedly be worse than the present. The same research shows that we believe this in spite of facts to the contrary, driven largely by our stubborn ignorance about the way national development indicators have actually improved,” wrote Gore in a guest article in the Financial Mail (South Africa) issue of December 6 to December 12.
Does this sound familiar?
Well, he could have been talking about Zimbabwe.
Gore also warned that a declinist narrative has two particularly dangerous consequences: “First, we don’t see our country’s progress”, and secondly, “we erroneously perceive our anomalies as insoluble anomalies”.
He adds: “The danger herein is that attitude drives fundamentals, not the other way around. The effect of the above is that we start perceiving our country and its economy as risky, and we avoid investing, when the opposite should be the case. . .
“Behavoural economics tells us we are doubly as motivated by potential loss as we are by potential gain. So if we are to ever solve our country’s problems, which are real and substantive, we can’t, ironically, obsess myopically about what we perceive to be the negatives. We need to have a sense of what’s at risk – a future worth losing – and this means seeking out positive signals as well and integrating them into our perspectives and decision-making.”
It is difficult to ignore or argue against such a breathtakingly incisive assessment.
We, too, are incorrigibly ignorant about how our national development indicators have actually improved. The mining sector, especially the gold sub-sector, has performed remarkably well
Statistics from Fidelity Printers and Refiners – the country’s sole gold buyer – indicate that gold output rose to 31,6 tonnes by the end of November, which is 6,8 tonnes more than the 24,8 tonne realised for the whole of 2017.
To put this in perspective, output and delivery of the yellow metal is the highest since gold production was first reported in Zimbabwe in the 13th Century.
The upward trajectory is the same for minerals such as diamonds, platinum, coal et cetera.
This definitely has to count for something, considering that mining contributes the lion’s share to national revenues.
Equally remarkable progress has been noted in agriculture, which employs 70 percent of the population and contributes 60 percent of raw materials to industry.
This year, Zimbabwe has recorded the highest ever tobacco deliveries (250 million kilogrammes) since commercial production of the golden leaf began in 1894.
Last year, deliveries topped 186 million kg.
The impact on the fiscus has obviously been immense, as this year’s sales rose to $733 million from $553 million a year ago, which represents an incredible leap of more than $179 million.
The same pattern is being mimicked in the cotton sub-sector, where deliveries rose to more than 130 000 tonnes, up from 70 000 tonnes last year.
Exports of cotton lint naturally rose as a result.
Further, the tourism industry is expecting its best year ever.
Visitors to various destinations across the country are projected to top 2,7 million this year, which is the highest in 19 years.
The success story of the sector is, however, convincingly told by strong results that are being recorded by hospitality industry players.
Overall, Zimbabwe’s exports rose by 17 percent to $5,6 billion in the January to November period, from $4,8 billion in the same period a year ago.
This represents a phenomenal jump of more than $800 million in the last 12 months.
Quite clearly, the sweeping reforms that are presently being pursued by the new political administration can only add tailwinds to local economic growth.
Our collective actions as Zimbabweans will ultimately define how our economic recovery process is likely to pan out.
We have two clear choices: we can either make it easy or difficult.
We, therefore, need to unlearn the enervating cognitive bias that we are doomed.
We are not.
As Adrian Gore says, “attitude drives fundamentals”.
Continuing to relentlessly attack our country, and most often in circumstances where this is unwarranted, can only serve to bog us down.
Prof Mthuli sleeping easy
Unfortunately, the recent – but not unexpected – shocks that affected the market after the October 1 fiscal and monetary policy interventions have been feeding the declinist narrative for the past three months.
When the Finance Minister slammed the brakes on Government’s spending binge, there was bound to be some whiplash.
And three months down the line, the picture is becoming clearer.
There has been better price discovery of the RTGS and bond notes, and parallel market exchange rates have since stabilised.
As exports continue rising and the tobacco marketing season approaches, the rates might go down further, and with them the associated pricing pressures.
Prof Ncube should be sleeping easy because the market is doing the job for him.
One of the major issues that remain outstanding in Zimbabwe’s current reform process is clearing arrears owed to international finance institutions and other bilateral creditors.
This might possibly be top on Treasury’s 2019 to-do list.
Clearing the country’s arrears will improve the country’s creditworthiness and integrate the country to the global financial system.
It also makes it possible for private companies to reopen traditional financing windows, which help relieve pressure on the Reserve Bank of Zimbabwe.
We are really on the right path, but we still have to walk the hard miles.
A positive mindset and unity of purpose will definitely help.
Our challenges are not insoluble.
Economists usually warn of “headline risks”, which glibly mean the deleterious impact of negative newspaper headlines and stories.
So, declinism must not be afforded any space in a country that is investing all its energies to put the economy on the right path.
It is one of the “isms” – together with regionalism and tribalism – that must die in 2018. – Sunday Mail